New IRS Mileage Rates Take Effect for 2026

The IRS has released the standard mileage rates for 2026, reflecting updated cost data and inflation adjustments. The most notable change is an increase in the business mileage rate, which rises by 2.5 cents per mile beginning January 1, 2026.

Standard mileage rates are an optional method taxpayers may use to calculate deductible vehicle expenses for business, charitable and medical purposes. In limited cases, the rate may also apply to moving expenses for certain active-duty military members — and now, under the One Big Beautiful Bill Act (OBBBA), certain members of the intelligence community.

2026 Standard Mileage Rates

For travel beginning January 1, 2026, the IRS has set the following rates for cars, vans, pickups and panel trucks:

• 72.5 cents per mile for business use, up from 70 cents in 2025
• 20.5 cents per mile for medical purposes, down 0.5 cents from 2025
• 20.5 cents per mile for moving purposes for eligible active-duty military members and qualifying intelligence personnel
• 14 cents per mile for charitable use, unchanged from 2025

These rates apply to gasoline, diesel, hybrid and fully electric vehicles.

How the Rates Are Determined

The mileage rate for business use is based on an annual IRS study of both fixed and variable costs of operating a vehicle, including depreciation, insurance and maintenance. By contrast, the rates for medical and moving purposes are calculated using only variable operating costs. The charitable mileage rate is set by statute and does not change with operating cost studies.

Important Deduction Limitations

Under current law, most employees can’t deduct unreimbursed employee travel expenses as miscellaneous itemized deductions. However, certain above-the-line deductions remain available for:

• Eligible educators
• Certain members of a reserve component of the Armed Forces
• Qualified state and local government officials
• Certain performing artists

Additionally, only active-duty military members and certain members of the intelligence community may deduct moving expenses incurred under orders for a permanent change of station.

Choosing the Standard Mileage Rate

Using the standard mileage rate is optional. Taxpayers may instead deduct actual vehicle expenses, such as fuel, repairs, insurance and depreciation.

Important rules to note:

• For owned vehicles, taxpayers must choose the standard mileage rate in the first year the vehicle is used for business. In later years, they may switch between methods.
• For leased vehicles, taxpayers must use the standard mileage rate for the entire lease term, including renewals.

Additional Guidance

IRS Notice 2026-10 provides the official 2026 mileage rates, along with details on maximum automobile values used for employer reimbursement plans and valuation rules for employer-provided vehicles.

If you have questions about which method makes sense for your situation, consult your tax advisor to ensure you’re maximizing allowable deductions.